Iran's Strait Controls Oil Prices, Despite Escalating Tensions
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The biggest weapon in Iran's arsenal has been its ability to shut down the Strait of Hormuz, a vital shipping lane for petroleum. Since the strait's closure, oil and gas prices have soared, costing US consumers an estimated $71.5 billion more to fill up their cars than they otherwise would have paid.
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FortuneBut Iran has found leverage through its own strikes in the critical Strait of Hormuz, where relatively few vessels carrying oil and liquefied natural gas are risking passage. Trump again declared Thursday that the “Strait of Hormuz is open,” saying 24 vessels passed through a day earlier. That’s a fraction of the roughly 130 vessels that passed through the vital waterway daily before the war began.
ZeroHedgeThe takeaway from Goldman's Struyven is that, even though the critical waterway has not fully reopened, a growing fleet of dark tankers is transiting the strait and defying Iran's blockade. That raises the question we have asked in recent weeks: Is Iran's geopolitical leverage over the Strait of Hormuz eroding?
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Oil exports from the Persian Gulf have rebounded to roughly two-thirds of pre-war levels, which could keep prices below $90 even if the Iran war drags on, according to Goldman Sachs analysts.
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ZeroHedgeReinforcing this week's developments, new data from Daan Struyven, Goldman's co-head of Global Commodities Research and head of oil research, show that Persian Gulf oil exports have recovered to more than two-thirds of prewar levels.
CNBCGoldman Sachs estimates the Gulf states are exporting roughly 15 million to 16 million barrels of oil per day, or more than 60% of the amount the region supplied to the world before the Iran war started. Oil exports from the Gulf are still 7 million bpd to 8 million bpd below the normal level before the war, Goldman analysts estimated in a note Thursday. But shipments have surged 5 million bpd to 6 million bpd above the bottom hit in March during the worst phase of the war, they said.
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Oil shipments through the Strait of Hormuz are estimated at 8 million to 10 million barrels per day. Traders surveyed by Bloomberg place that range much lower, at between 6 million and 8 million barrels per day.
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New York Post BusinessOil exports through the Strait of Hormuz alone likely account for 8 million to 10 million barrels, close to US officials’ estimates, according to the Goldman note.
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These revisions suggest oil transits through the Strait of Hormuz are probably close to Trump administration's estimates of 8 million bpd to 10 million bpd, they said. "The rise in dark crossings by specialized shippers and in ship-to-ship transfers shows that producers and shippers are adapting to the Mideast conflict," Daan Struyven, head of oil research at Goldman, and his colleagues told clients. "Shipping markets now price in disruptions likely continuing well into 2027."
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ZeroHedge"Although our estimates focus on total Gulf flows, the upward revisions suggest Strait of Hormuz oil transits are likely close to US officials' 8-10mb/d estimates. The rise in dark crossings by specialized shippers and in ship-to-ship transfers shows that producers and shippers are adapting to the Middle East conflict," Struyven told clients.
New York Post Business“The rise in dark crossings by specialized shippers, and in ship-to-ship transfers shows that producers and shippers are adapting to the Mideast conflict,” Goldman said in the note.
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Higher dark flows could “moderate the upside to crude oil prices even if Mideast disruptions last longer,” the note added.
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ZeroHedgeHe noted, "Shipping markets now price in disruptions likely continuing well into 2027 (Exhibit 7). Still, potential additional dark flows and price-sensitive China net crude imports may moderate the upside to crude oil prices even if Mideast disruptions last longer. We continue to see greater price upside to European natural gas prices and deferred oil product prices in persistent disruption scenarios than for crude."
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The illegal war with Iran that President Donald Trump said would be over in a matter of weeks entered its sixth month on Friday, and there is little sign of it wrapping up in the near future.
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FortunePresident Donald Trump arrives at an awkward moment for his presidency on Friday as the U.S.-Israel war against Iran reaches the six-month mark, a notable milestone for a conflict that the Republican leader repeatedly assured Americans would be a “little excursion” lasting a matter of weeks.
BloombergIran War Hits 6 Month Mark Bloomberg Businessweek looks back on the past six months of the US war with Iran, including how President Trump's timeline for the conflict has shifted as talks with Tehran remain mostly stalled. Bloomberg News White House and National Security Editor Michelle Jamrisko discusses how the war has evolved, and what might come next. (Source: Bloomberg)
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"The turn to using sanctions as the cudgel of choice," wrote the AP, "comes as the administration weighs diminished munitions stockpiles after months of war, sparking concerns that the prolonged conflict could undermine US military readiness in other parts of the globe."
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FortuneThe turn to using sanctions as the cudgel of choice comes as the administration weighs diminished munitions stockpiles after months of war, sparking concerns that the prolonged conflict could undermine U.S. military readiness in other parts of the globe.
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Independent claims that didn't surface elsewhere in our corpus. Treat as supplementary — not corroborated across outlets.
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01 ZeroHedge Gas prices have climbed sharply across the U.S. following the outbreak of the Iran War, but the size of the increase varies significantly by state.
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02 MarketWatch Goldman argues the oil market is ‘adapting’ to the conflict On the six-month anniversary of the war in Iran, divisions are apparent on Wall Street about the trajectory for oil prices, with some arguing markets may be a little too sanguine about the potential for further spikes.
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03 CNBC It has become difficult to figure out how much oil is flowing from the Gulf because information on tanker traffic in the region is limited and delayed due to the war, the analysts said. @CL.1 @LCO.1 YTD mountain WTI, Brent YTD More tankers are leaving the region with their transponders turned off so they don't show up in real time on ship-tracking platforms, they said. Satellite coverage to detect vessels is limited and ship-to-ship transfers outside Hormuz have increased, they said. As a result, oil volumes from the Gulf are revised higher later when tankers turn their transponders back on and are detected, the analysts said.
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04 Bloomberg Iran War Exposes Limits of US Military Endurance Six months into the US conflict with Iran, oil flows from the Persian Gulf have recovered to about 40% of prewar levels, but risks remain as the Strait of Hormuz stays constrained and the Navy faces mounting pressure on personnel, equipment and finances. Bloomberg News Economic Statecraft Lead Chris Kennedy and Bloomberg News Defense Reporter Jen Judson join hosts Christina Ruffini and Bailey Lipschultz on Bloomberg This Weekend and discuss the strain on US military readiness and why a new US deal involving Venezuelan oil fields is unlikely to deliver a significant near-term boost to global supply. (Source: Bloomberg)
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05 Fortune And this week his administration said it would turn its focus to increasing economic pressure — rather than military action — to try to finish off Iran. The shifting strategy centers on threats to punish any country or entity that continues to conduct business with Tehran.
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06 Common Dreams Trump has "lost the Iran War in every way possible in less than six months," said one critic.
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07 New York Post Business That’s about 7 million to 8 million barrels below pre-war levels, but a huge improvement from the 5 million to 6 million barrels a day that were being transmitted through the waterway in March, the note said.
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